How to Protect Your Business from De-growth?
The corporate fraternity in India is talking about business degrowth and slowdown. The recent layoffs have started conversations about what measures to take in the face of the problem of loss of revenue.
How have you been experiencing this phase? Most people think they should maximise their marketing activity in order to sell more and get more revenue.
We think that pumping in a lot of money into advertising/marketing is missing the point. Read on to find out how it’s not just ad agencies that can help you take care of your business.
If the root of your problem is not bad advertising or marketing, why will you hire an ad agency? We propose you give a thought to working with consultants.
Let’s see why.
The Problem
These are desperate times. While The Guardian warns about the recession in 2020, Forbes lists countries that are likely to be seriously affected.
Banks alone are set to layoff over 50,000 employees. If you add sectors like the auto industry, the numbers keep going up.
If such a tough time is going to hit you, assuming it’s not already done that, how have you planned to manage the situation?
The core challenges that businesses face at all times revolve around reducing losses and maximizing profits. At a time of degrowth, these challenges are going to get worse.
“Why?” you may ask.
Businesses tend to turn to the option of reducing costs but maximizing marketing activity by:
a. Hiring advertising agencies, or
b. Hiring digital marketing agencies
And, they don’t feel any better after hiring these either.
Well, data about the client-agency relationships are hard to find but as this last report we could find shows, brands are not happy with their ad agencies.
But how is that related to the degrowth in your specific business ? — you may wonder.
Brands have conventionally thought of pumping in more money into advertising for creating more awareness, or announcing offers and discounts, whenever it’s got tougher to survive.
As it turns out, advertising is not your solution even in the “normal” times. How will it help you during the tough times?
Business leaders also use digital marketing agencies as a substitute of ad agencies. The only difference they see is that the creatives now go in soft copies instead of hard copies of print ads and billboards.
And that’s pathetic because marketing and selling are not the only solution to survive business degrowth.
Heck, they aren’t even the only business challenges you’ve been facing.
So, it doesn’t make sense to turn to advertising, marketing and selling to prepare for every business challenge you face.
Using digital marketing as if it were advertising makes matters worse.
So while you’re not happy with the ad agency you’ve hired, rest assured you’ll not be happy with the digital marketing agency either.
The Business Challenges’ Test
We’ve compiled a list of challenges that businesses face. Use this list to understand how your agency has helped you with any of these questions.
Below is a list of business challenges you must ask yourself while evaluating how your agency has partnered with you so far. The answer to each question is one of these three: yes, no, and somewhat.
Each answer has a numerical value. ‘No’ stands for 0, ‘Yes’ stands for 2, and ‘Somewhat’ stands for 1. Look at the score at the end.
Does Your Agency Help You With?:
Let’s Analyse If An Ad Agency Can Solve Your Problem
If you gave yourself a score of 50–82, you are sorted. You are in a business that does not experience degrowth the way most other businesses do. Or you have a great agency working with you. And that’s good.
If you gave yourself a score of 20–49, you have the time to evaluate how you’ll approach the list with your agency or to manage your expectations from your agency.
If you gave yourself a score of 0–20, you are in a difficult position.
The Cause of Your Problems
A bad score on the test above indicates one of the following possibilities:
- You have some other means and resources to tackle your other business needs.
- You think that by fixing advertising, you can increase your business.
If it’s the option ‘b’, it’s very likely that you’ve been adopting short-term tactics to survive. The hollowness of these tactics hurts the most when you see your business degrowing.
More advertising doesn’t mean more sales even in the “normal” period. And what if you do manage to sell more but you have plenty of leakages elsewhere reducing your overall profitability?
Agencies typically don’t help with product innovation. Or optimize your sales cycle. If your process of manufacturing is expensive or generates a lot of waste (which, in turn, attracts fines from the governments), how will your agency help you fix that with their core expertise in advertising?
The Solution to Your Business Challenges
Hiring a consulting firm gives you returns that hiring an agency cannot. If you’ve never worked with a consulting firm, the following differences can help you understand the consulting model.
There are many consulting models. We’ve put together what we think is common to all most ways of consulting.
It’s not an exhaustive list. It’s only meant to help you understand how consulting works. If you’ve never worked with a consulting firm, this list can help you understand what to expect from your interaction and relationship with one.
Back to the Issue of Business Degrowth
If your business problems are related to product, people, process and technology, there’s no way a branding/marketing/communication strategy can fix it all.
Again, these are desperate times. And desperate times call for different measures, if not desperate ones.
You may have invested a lot of your energy and resources into agencies. You may changed several agencies too because you may have felt that another agency will “get” what you’ve been trying to communicate.
And firing an agency has looked like a solution to you.
But then you’ve seen that one agency after the other does the same thing — offer to rebrand and reposition you. It may have worked well in the beginning. But how long did the “freshness” last?
Or did it do more harm than good?
But here’s a scary possibility. What if your strategy behind everything were wrong? The very idea of thinking about your core business challenge as something related to lack of good advertising.
What if your product were wrong?
What if its pricing weren’t right?
What if you were targeting wrong audience or targeting them wrongly?
These questions will stare hard at you during tough times indirectly through your P&L sheets if you don’t face them head on right now.
So, Will it Affect You?
Any phase of degrowth, this time or some other time, will affect you if you’ve avoiding the questions that are fundamental to your business goals.
The problem is compounded by the possibility that you do not know which questions are the right questions to ask.
And How Should You Prepare Yourself?
That’s simple. Ask the right questions.
Ask those questions to every concerned team and process.
Or, get in touch with someone who can help you identify and articulate the questions that matter.
Degrowth hits the most to businesses that are built on the quicksand of short-term remedies like advertising that merely make the edifice look good.
The best way to prepare yourself for any business challenge is to ensure you develop strong foundations on solid grounds.
Let us know what you think.
